Ashalata Kulshrestha, Ahmedabad V. The ITO, Ward-7(1)(3), Ahmedabad

MA 23/AHD/2023

AI Insights

The case involves Ashalata Kulshrestha, who initially sold a property to her daughter and later reclaimed part of it due to an error in the recorded land area. The dispute centered on the correct classification of capital gains from the sale of this property. The Assessing Officer classified the gains as short-term capital gains, which was upheld by the CIT(A) and initially by the ITAT. However, the assessee contested that part of the land should be considered under long-term capital gains due to the delayed formal recognition of ownership. The Tribunal's decision to recall the order indicates a need for a detailed examination of the specific circumstances under which the land was transferred back to the assessee.

• Counselvise Citation: [2023] 140 COUNSELVISE.COM (IT) 131511 (ITAT-AHMEDABAD)
• Duration Of Justice: 2 month(s) 14 day(s)
• Appeal Type: Miscellaneous Application
• Pronouncement Date: 26-04-2023
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: D
• Next Hearing Date: 16-03-2023
• Assessment Year: 2016-2017
• Appeal Filed On: 12-02-2023
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Keywords: Capital Gains

Judgement Text

THE INCOME TAX APPELLATE TRIBUNAL AHMEDABAD “D” BENCH Before: Shri Waseem Ahmed, Accountant Member And Shri Siddhartha Nautiyal, Judicial Member Ashalata Ku lshreth a, 14, Radh ekrish an Bu ngalow, Nr. Fire Station, Bodakdev, Ah medabad PAN: AJMP K6 180G (Appellant) Vs The ITO, Ward-7(1)(3), Ah med abad (Resp ondent) Asses see b y : Shri S. N. Sopa rkar, Sr. A. R. & Shri Parin Shah, A. R. Revenue by : Shri Atul Pandey , S r. D. R. Date of hearing : 17-03 -2 023 Date of pronouncement : 27-04 -2 023 आदेश /ORDER PER : SIDDHARTHA NAUTIYAL, JUDICIAL MEMBER:- This Miscellaneous Application filed by the assessee is against the order passed by ITAT in ITA No. 738/Ahd/2019 A.Y. 2016-17 vide order dated 12-12-2022. M.A. No. 23/Ahd/2023 (in ITA No. 738/Ahd/2019) Assessment Year 2016-17 M.A No. 23/Ahd/2023 (In I.T.A No. 738/Ahd/2019) A.Y. 2016-17 Page No. Ashalata Kulshrestha vs. ITO 2 2. The brief background of the case is that the assessee had bought property by way of a registered conveyance deed on 10-10-1986. Thereafter, the said property was sold by the assessee to her daughter by way of registered deed on 16-01-2006. Subsequently, the assessee observed that in the original conveyance deed on 1986 land area was erroneously mentioned at 66.92 sq. mt. instead of land area of 302.86 sq. mt. When the assessee approached the Gujarat Housing Board for a clarification, on this balance land of 235.94 sq. mt. (302.86-66.92) in favour of the daughter, the Gujarat Housing Board informed the assessee that such change in ownership can be made only in the hands of the assessee and not in the hands of the daughter to whom the property had been transferred by the assessee. Accordingly, the assessee executed a cancellation deed dated 31-07-2015 to cancel deed dated 16-01-2006 entered between the assessee and her daughter. Thereafter, on 31 st July, 2015 the assessee executed an alteration agreement with Gujarat Housing Board clarifying that the ownership of open land of 235.96 sq. mts vested with the assessee. Subsequently, the assessee sold entire property on 09-10-2015 for total sale consideration of Rs. 2.31 crores and offered long term capital gains in respect of the aforesaid property. The Assessing Officer held that the capital gains earned by the assessee on such sale of property is short term capital gains and not long term capital gains since property came into the possession of the assessee on 30-07-2015 consequent to cancellation of sale deed between the assessee and her daughter. The aforesaid addition was confirmed by the ld. CIT(A). The appeal of the assessee against the aforesaid order of ld. CIT(A) was also dismissed by the ITAT vide order dated 12-12-2022 in ITA No. 738/Ahd/2019 A.Y. 2016-17. The present MA has been filed by the M.A No. 23/Ahd/2023 (In I.T.A No. 738/Ahd/2019) A.Y. 2016-17 Page No. Ashalata Kulshrestha vs. ITO 3 assessee submitting that the ITAT erred in not appreciating the alternate ground taken by the assessee that so far as the ownership of the balance land of 235.94 sq. mt is concerned, the same came into the possession of the assessee only when the assessee executed an alteration agreement with Gujarat Housing Board clarifying the ownership of the open land 235.94 sq which was effective from 05-08-1986. mt. The assessee submitted that the ITAT has erred in not appreciating that this balance land of 235.94 sq. mt ought to be taxed as long term capital gains while the earlier land amounting 66.92 sq. mts. may be taxed as short term capital gains. This is for the reason that conveyance deed referred to only 66.92 sq. mts. area and legal rights for 235.94 sq. mts came to be allotted to the assessee through alternation agreement having effect from 05-08-1986. Accordingly, the capital gains pertaining to 235.94 sq. mts. should be taxed as long term capital gains. 3. After giving a thoughtful consideration, we find merits in the contention of the ld. counsel for the assessee. Accordingly, the order of the ITAT is hereby recalled and may be fixed for fresh hearing to hear the arguments of the assessee with respect of taxability of the transfer of 235.94 sq. mts. of land which came into the possession of the assessee by way of alteration deed entered with the Gujarat Housing Board on 31 July, 2015. Accordingly, the original order is recalled to the limited extent to determine the taxability of the additional land of 235.94 sq. mts. So far as the taxability of land amounting 66.92 sq. mts is concerned, we find no infirmity in the order of ITAT wherein it held that the same is liable to tax as short term capital gains in the hands of the assessee. Accordingly, the order is M.A No. 23/Ahd/2023 (In I.T.A No. 738/Ahd/2019) A.Y. 2016-17 Page No. Ashalata Kulshrestha vs. ITO 4 being recalled for the fresh hearing with respect to the taxability of the open land of 235.94 sq. mts. 4. In the result, the MA filed by the assessee is allowed to the extent given above. Order pronounced in the open court on 27-04-2023 Sd/- Sd/- (WASEEM AHMED) (SIDDHARTHA NAUTIYAL) ACCOUNTANT MEMBER JUDICIAL MEMBER Ahmedabad : Dated 27/04/2023 आदेश क त ल प अ े षत / Copy of Order Forwarded to:- 1. Assessee 2. Revenue 3. Concerned CIT 4. CIT (A) 5. DR, ITAT, Ahmedabad 6. Guard file. By order/ आदेश से, उप/सहायक पंजीकार आयकर अपील य अ धकरण, अहमदाबाद